Hitachi, UK say no decision taken on British nuclear project

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01/11/2019 | 10:18am EST

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LONDON/TOKYO (Reuters) - Japan's Hitachi has yet to decide whether to proceed with its trillion yen ($28 billion) nuclear project in Britain and talks with the government are continuing, the company and government said on Friday.

Hitachi's Horizon Nuclear Power unit has struggled to find investors for its plans to build a plant in Anglesey, Wales, which could provide about 6 percent of Britain’s electricity.

Japan’s Nikkei business daily reported that Hitachi had decided to freeze the project, although it also reported that the board had yet to vote to make it a formal decision.

A spokeswoman for British Prime Minister Theresa May said talks with Hitachi were continuing. "The negotiations on that are ongoing and those are obviously commercially sensitive so I can't comment," she told reporters.

May met Japanese Prime minister Shinzo Abe this week in London. He told her Japan did not want to see a disorderly Brexit when Britain leaves the European Union in March.

Hitachi said in Friday's statement that it had been assessing the project "including its potential suspension and related financial impact."

"Should any matter arise which needs to be disclosed Hitachi will announce information in a timely manner," Hitachi said.

Nikkei reported that Hitachi had decided to freeze the project, leading to a special loss of 200 billion to 300 billion yen ($1.9 billion to $2.8 billion) for the year ending in March. Hitachi's board would vote on the suspension at a meeting next week, it reported, without citing its sources.

Hitachi said in its statement on Friday: "These articles aren't based on Hitachi's decision or disclosed information."

Hitachi was hoping a group of Japanese investors and the British government would each take a one-third stake in the equity portion of the project. A company source has said the project would be financed one-third by equity and rest by debt.

Britain wants new nuclear plants to help replace its aging fleet of nuclear and coal plants coming offline in the 2020s, but high up-front costs have deterred construction.

Another Japanese firm, Toshiba Corp, scrapped its British NuGen project last year after its U.S. reactor unit Westinghouse went bankrupt and it failed to find a buyer.

Britain's Nuclear Industry Association said it is vital new nuclear projects went ahead to maintain electricity supplies.

"New nuclear is an integral part of a future decarbonised power supply," said the association's chief executive, Tom Greatrex, said.

Environmental group Greenpeace said Britain should rethink its energy strategy and place more focus on renewable energy.

Shares of Hitachi rose by as much as 6 percent on the Tokyo stock exchange after the report.